Amid the brewing Italian crisis, many political and financial pundits are openly wondering if Italy, the third-biggest economy in continental Europe, will leave the Euro zone. Such a measure would be unimaginable in scope, rendering the multinational union almost pointless and irrelevant. Yet that’s exactly what several business executives fear.
According to CNBC’s Global CFO Council, a quarterly survey which tracks sentiment among today’s top business leaders, nearly 77% of international respondents had some concerns that the Italian crisis could lead to another high-profile exiting from the Euro zone. This figure jumped higher from the last time the CFO Council survey was conducted, which had a “somewhat concerned” allocation of 72.1%.
At that time, just under 21% of respondents were not concerned about Italy leaving the Euro zone. But as things stand now, this group is surely bleeding numbers.
The Italian crisis is in full swing. Taking a page off the populist movement taking over several western countries – most notably the U.S. with the election of President Donald Trump – Italy affirmed its nationalistic cred. Currently, much of the country’s governmental power is centered around interior minister and far-right Lega leader Matteo Salvini.
If you consider the growing discontent over the Euro zone, you have to believe that the Italian crisis will worsen, eventually triggering a self-requested dismissal. Nor is it a stretch of the imagination. Just a day and two years ago, Great Britain’s constituents voted to leave the Euro zone, causing ripple effects throughout the world.
And the surveyed business executives are right to be worried. A second Brexit would cause the entire Euro zone to fall under disrepute. Additionally, the Italian crisis was sparked by shared populist concerns that catalyzed the path to Brexit.
Primarily, Euro zone countries absorbed an overwhelming – and some might say crippling – number of refugees from the Middle East. Italians in particular didn’t want to stifle their already struggling economy with migrants, many of whom request government services such as welfare and free healthcare.
Just having an unexpected burst of population size, particularly one that doesn’t speak their language or understand/respect their culture, was enough for average Italians to cry foul.
No doubt, Italy leaving the Euro zone will damage the international economy. But one distinct positive is that another Brexit would cause government bodies to give respect to populist movements. Like it or not, what the Italian crisis has demonstrated is that individual countries just want to be left alone to handle their affairs.
They do not want to be told what to do, nor whom they should accept. And frankly, I can’t blame them. It’s not my business, and I have my own problems to deal with. If only governments would have learned this lesson earlier!